MOROCCO sees itself as the first newly-industrialising country in the Mediterranean. Some may argue that this is perhaps too ambitious an interpretation, but there is no doubt that the kingdom stands out from the other North African countries not only in economic liberalisation but also in political stability.
Morocco is now concentrating on liberalising its foreign trade regime and on simplifying its foreign exchange regulations to achieve the full convertibility of the dirham. Coupled with this are banking reforms to allow offshore banking in Tangiers and the opening up of the financial market.
Morocco has already launched a foreign investment and export promotion drive. Hassan Abouyoub, the minister of foreign trade, foreign investment and tourism, explained to The Middle East that the effort is designed to show "that Morocco is not only a country of oranges and lemons but also of advanced technology and value-added |products~."
For the foreign investor there is already full convertibility of the dirham since full foreign ownership and repatriation of profits are allowed under the Foreign Investment Law. Added value and capital-intensive investments are the policy targets.
Abouyoub's priority is to implement the various banking, foreign trade and privatisation reforms. Banking reforms will seek to ensure universal banking, removing inequalities from the system. Credit worthiness of the banking sector cannot be achieved without these reforms.
As far as the time scale of full convertibility of the dirham in terms of the current account is concerned, Abouyoub claims it will be achieved sometime during 1993. Developing the capital market is also essential, especially after convertibility is established.
According to Western firms such as Glaxo, the second biggest pharmaceutical company in the world, Morocco has a business climate second to none in the Arab world. It is liberalised, repatriation of profits is easy, and exchange controls were relaxed on 1 January 1993.
Morocco is also a member of GATT. Over the years import duties have been reduced and import licence requirements relaxed. It has, for example, a viable local pharmaceutical sector. Glaxo says that it invested in Morocco in a joint venture because the country has a 26m population which is relatively large, its GDP per capita is an acceptable $1,040 and its local pharmaceutical sector is worth over $251m.
Investment from fellow Arab states, especially in the GCC, is active but...